6-K
Stratasys Ltd. (SSYS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of November 2022
Commission File Number 001-35751
STRATASYS LTD.
(Translation of registrant’s name into English)
| c/o Stratasys, Inc.7665 Commerce WayEden Prairie, Minnesota 55344 | 1 Holtzman Street, Science ParkP.O. Box 2496Rehovot, Israel 76124 |
|---|
(Addresses of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
CONTENTS
Quarterly Results of Operations
On November 10, 2022, Stratasys Ltd. (“we” or “us”) announced our financial results for the third quarter ended September 30, 2022. A copy of our press release announcing our results is furnished as Exhibit 99.1 to this Report of Foreign Private Issuer on Form 6-K (this “Form 6-K”) and is incorporated herein by reference.
In conjunction with the conference call being held on November 10, 2022 to discuss our results, we are furnishing a copy of the slide presentation that provides supplemental information regarding our business and our financial results, and which will be referenced on that conference call. We have attached that presentation to this Form 6-K as Exhibit 99.2, which exhibit is incorporated herein by reference.
The information in this Form 6-K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| STRATASYS LTD. | ||
|---|---|---|
| Dated: November 10, 2022 | By: | /s/ Eitan Zamir |
| Name: | Eitan Zamir | |
| Title: | Chief Financial Officer |
2
EXHIBIT INDEX
The following exhibits are furnished as part of this Form 6-K:
3
Exhibit 99.1
StratasysReleases Third Quarter 2022 Financial Results
| ● | Consolidated Revenues grew 2.0%, and increased 7.8% as adjusted for divestitures and on a constant currency basis |
|---|---|
| ● | Third quarter GAAP net income of $18.7 million, or $0.28 per diluted share, and non-GAAP net income of $3.3 million, or $0.05 per diluted share |
| --- | --- |
| ● | $348.7 million of cash and cash equivalents and no debt at quarter end |
| --- | --- |
| ● | Updates 2022 full-year outlook reflecting approximately 10% revenue growth over 2021 adjusted for divestitures |
| --- | --- |
MINNEAPOLIS, MN & REHOVOT, Israel - (BUSINESS WIRE) - November 10, 2022 - Stratasys Ltd. (Nasdaq: SSYS), a leader in polymer 3D printing solutions, today announced financial results for the third quarter of 2022.
Third Quarter 2022 Financial ResultsCompared to Third Quarter 2021:
| ● | Consolidated<br>revenue of $162.2 million, up 2.0% compared to $159.0 million; adjusted revenue excluding divestitures and on a constant currency basis<br>increased 7.8%. |
|---|---|
| ● | GAAP<br>gross margin of 43.6% versus 42.9%. |
| --- | --- |
| ● | Non-GAAP<br>gross margin of 48.5%, compared to 48.2%. |
| --- | --- |
| ● | GAAP<br>operating loss of $15.6 million, compared to a GAAP operating loss of $21.9 million. |
| --- | --- |
| ● | Non-GAAP<br>operating income of $4.5 million, versus non-GAAP operating income of $1.8 million. |
| --- | --- |
| ● | GAAP<br>net income of $18.7 million, or $0.28 per diluted share, compared to net loss of $18.1 million, or ($0.28) per diluted share. |
| --- | --- |
| ● | Non-GAAP<br>net income of $3.3 million, or $0.05 per diluted share, versus non-GAAP net income of $0.5 million, or $0.01 per diluted share. |
| --- | --- |
| ● | Adjusted<br>EBITDA of $9.9 million, compared to $7.8 million. |
| --- | --- |
| ● | $18.4<br>million of cash used by, compared to $3.0 million of cash generated from, operating activities, reflecting cash use for a continued augmentation<br>of inventories. |
| --- | --- |
Dr. Yoav Zeif, Stratasys’ Chief Executive Officer, said “We delivered our highest third quarter revenue in seven years. This was driven by 18.9% growth in our systems, excluding divestitures and on a constant currency basis. We have now achieved five consecutive quarters of positive earnings, demonstrating our unique ability to generate profitable growth even while navigating a challenging global economic backdrop that includes prolonged customer sales cycles and delayed consumables purchases.”
“As the leading provider of comprehensive polymer additive manufacturing products, software, and services solutions, we continue to enhance our core competencies and evolve our offerings to outpace our customers’ expanding needs. We are excited about the significant expansion of our materials portfolio across multiple technologies, which we believe will drive higher-margin consumables sales in the coming years. In addition, as part of our growth strategy we will keep selectively adding and incubating complementary new technology-driven businesses that we expect will spur incremental growth in the future. Stratasys is ideally positioned to provide the necessary solutions to catalyze our customers’ ongoing transformation from prototyping to additive manufacturing at scale while creating long-term value for all of our shareholders,” Dr. Zeif concluded.
1
Financial Outlook:
Based on current market conditions, and assuming that the collective impact of global supply chain costs, rising interest rates, currency risk and inflation does not further worsen economic activity, the Company is updating its outlook for 2022 to include the impact of $17 million from its Makerbot divestiture as follows:
| ● | Full year 2022 revenue of $648 million to $652<br> million, which includes the impact of approximately $13 million to reflect the anticipated impact of customer-related delays in the<br> purchasing of systems and materials due to anticipated, ongoing economic uncertainty as well as ongoing pressure on foreign exchange<br> rates. The updated outlook represents approximately 10% full year growth over 2021 after adjusting for the MakerBot<br> divestiture. |
|---|---|
| ● | Full-year<br> 2022 gross margins flat to slightly higher compared to full-year 2021, based on current logistics<br> and materials costs. |
| --- | --- |
| ● | Full<br> year-operating expenses $5 million to $10 million higher than 2021, primarily due to the<br> divestiture of MakerBot and by improved efficiencies. |
| --- | --- |
| ● | Full<br> year non-GAAP operating margins slightly above 2%. |
| --- | --- |
| ● | GAAP<br> net loss of $48 million to $39 million, or ($0.72) to ($0.59) per diluted share. |
| --- | --- |
| ● | Non-GAAP<br> net income of $6 million to $8 million, or $0.09 to $0.12 per diluted share. |
| --- | --- |
| ● | Adjusted<br> EBITDA of $34 million to $37 million. |
| --- | --- |
| ● | Capital<br> expenditures of $15 million to $20 million. |
| --- | --- |
Non-GAAP earnings outlook excludes $37 million to $38 million of anticipated amortization of intangible assets, $33 million to $35 million of non-cash share-based compensation expense, $39 million gain from deconsolidation of MakerBot, and reorganization and other expenses of $14 million to $16 million. Non-GAAP outlook includes tax adjustments of $3 million to $5 million on the above non-GAAP items.
Appropriate reconciliations between GAAP and non-GAAP financial measures are provided in a table at the end of this press release and slide presentation, with itemized detail concerning the non-GAAP financial measures.
Stratasys Ltd. Third Quarter 2022 Webcast and Conference Call Details:
The Company plans to webcast its conference call to discuss its third quarter 2022 financial results on Thursday, November 10, 2022, at 8:30 a.m. (ET).
The investor conference call will be available via live webcast on the Stratasys website at investors.stratasys.com, or directly at the following web address:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=Aau6uFJK
To participate by telephone, the U.S. toll-free number is 877-407-0619 and the international dial-in is +1-412-902-1012. Investors are advised to dial into the call at least ten minutes prior to the call to register. The webcast will be available for six months at investors.stratasys.com, or by accessing the above-provided web address.
2
Stratasysis leading the global shift to additive manufacturing with innovative 3D printing solutions for industries such as aerospace, automotive, consumer products and healthcare. Through smart and connected 3D printers, polymer materials, a software ecosystem, and parts on demand, Stratasys solutions deliver competitive advantages at every stage in the product value chain. The world’s leading organizations turn to Stratasys to transform product design, bring agility to manufacturing and supply chains, and improve patient care.
To learn more about Stratasys, visit www.stratasys.com, the Stratasys blog, Twitter, LinkedIn, or Facebook. Stratasys reserves the right to utilize any of the foregoing social media platforms, including the Company’s websites, to share material, non-public information pursuant to the SEC’s Regulation FD. To the extent necessary and mandated by applicable law, Stratasys will also include such information in its public disclosure filings.
Stratasys is a registered trademark and the Stratasys signet is a trademark of Stratasys Ltd. and/or its subsidiaries or affiliates. All other trademarks are the property of their respective owners.
Cautionary Statement Regarding Forward-Looking Statements
The statements in this press release regarding Stratasys’ strategy, and the statements regarding Stratasys’ projected future financial performance, including the financial guidance concerning its expected results for 2022 and beyond, are forward-looking statements reflecting management’s current expectations and beliefs. These forward-looking statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with Stratasys’ business, actual results could differ materially from those projected or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to: the degree of our success at introducing new or improved products and solutions that gain market share; the degree of growth of the 3D printing market generally; the impact of potential shifts in the prices or margins of the products that we sell or services that we provide, including due to a shift towards lower margin products or services; the impact of competition and new technologies; potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets; the extent of our success at successfully consummating and integrating into our existing business acquisitions or investments in new businesses, technologies, products or services; the degree of our success at locating and acquiring additional value-enhancing, inorganic technology that furthers our business plan to lead in the realm of polymers; the adverse impact that recent global interruptions, delays and increased costs related to freight carriers and other suppliers (including due to the Russian invasion of Ukraine) are having on our supply chain and distribution network, and, consequently, our ability to successfully sell both our existing and newly-launched 3D printing products; the strength and duration of, and degree of recovery from and resilience to, current adverse macro-economic conditions that are, in part, by-products of the COVID-19 pandemic, including inflation and rising interest rates, which are having, and may continue to have, significant consequences for our operations, financial position, cash flows, and those of our customers and suppliers; potential changes in our management and board of directors; global market, political and economic conditions, and in the countries in which we operate in particular; costs and potential liability relating to litigation and regulatory proceedings; risks related to infringement of our intellectual property rights by others or infringement of others’ intellectual property rights by us; the extent of our success at maintaining our liquidity and financing our operations and capital needs; the impact of tax regulations on our results of operations and financial condition; and those additional factors referred to in Item 3.D “Key Information - Risk Factors”, Item 4, “Information on the Company”, Item 5, “Operating and Financial Review and Prospects,” and all other parts of our Annual Report on Form 20-F for the year ended December 31, 2021, which we filed with the U.S. Securities and Exchange Commission, or SEC, on February 24, 2022 (the “2021 Annual Report”). Readers are urged to carefully review and consider the various disclosures made throughout our 2021 Annual Report and the Reports of Foreign Private Issuer on Form 6-K that attach Stratasys’ unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition, for the quarterly periods throughout 2022, which are furnished to the SEC throughout 2022, and our other reports filed with or furnished to the SEC, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. Any guidance provided, and other forward-looking statements made, in this press release are provided or made (as applicable) as of the date hereof, and Stratasys undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
3
Use of Non-GAAP Financial Measures
The non-GAAP data included herein, which exclude certain items as described below, are non-GAAP financial measures. Our management believes that these non-GAAP financial measures are useful information for investors and shareholders of our company in gauging our results of operations (i) on an ongoing basis after excluding mergers, acquisitions and divestments related expense or gains and reorganization-related charges or gains, legal provisions and currency-related fluctuations, and (ii) excluding non-cash items such as stock-based compensation expenses, acquired intangible assets amortization, including intangible assets amortization related to equity method investments, impairment of long-lived assets and goodwill, revaluation of our investments and the corresponding tax effect of those items. These factors eliminated in non-GAAP adjustments either do not reflect actual cash outlays that impact our liquidity and our financial condition or have a non-recurring impact on the statement of operations, as assessed by management. These non-GAAP financial measures are presented to permit investors to more fully understand how management assesses our performance for internal planning and forecasting purposes. The limitations of using these non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all items indicated above during a period, which may not provide a comparable view of our performance to other companies in our industry. Investors and other readers should consider non-GAAP measures only as supplements to, not as substitutes for or as superior measures to, the measures of financial performance prepared in accordance with GAAP. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table below.
Yonah Lloyd
CCO, VP Investor Relations
Yonah.Lloyd@stratasys.com
Source: Stratasys Ltd.
4
Stratasys Ltd.
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share data)
| December 31, | |||||
|---|---|---|---|---|---|
| 2021 | |||||
| ASSETS | |||||
| Current assets | |||||
| Cash and cash equivalents | 150,672 | $ | 243,179 | ||
| Short-term deposits | 198,056 | 259,000 | |||
| Accounts receivable, net of allowance for credit losses of 0.7 million and 0.5 million as of September 30, 2022 and December 31, 2021 | 140,258 | 129,382 | |||
| Inventories | 170,434 | 129,147 | |||
| Prepaid expenses | 8,146 | 6,871 | |||
| Other current assets | 26,838 | 33,123 | |||
| Total current assets | 694,404 | 800,702 | |||
| Non-current assets | |||||
| Property, plant and equipment, net | 194,214 | 203,295 | |||
| Goodwill | 64,844 | 65,144 | |||
| Other intangible assets, net | 129,682 | 152,244 | |||
| Operating lease right-of-use assets | 19,010 | 14,651 | |||
| Long-term investments | 143,928 | 28,667 | |||
| Other non-current assets | 21,309 | 12,519 | |||
| Total non-current assets | 572,987 | 476,520 | |||
| Total assets | 1,267,391 | $ | 1,277,222 | ||
| LIABILITIES AND EQUITY | |||||
| Current liabilities | |||||
| Accounts payable | 67,957 | $ | 51,976 | ||
| Accrued expenses and other current liabilities | 55,152 | 55,358 | |||
| Accrued compensation and related benefits | 34,862 | 44,684 | |||
| Deferred revenues - short term | 48,735 | 51,174 | |||
| Operating lease liabilities - short term | 6,977 | 7,276 | |||
| Total current liabilities | 213,683 | 210,468 | |||
| Non-current liabilities | |||||
| Deferred revenues - long term | 23,581 | 21,133 | |||
| Deferred income taxes - long term | 4,084 | 7,341 | |||
| Operating lease liabilities - long term | 11,738 | 7,693 | |||
| Contingent consideration - long term | 38,551 | 53,478 | |||
| Other non-current liabilities | 27,028 | 21,095 | |||
| Total non-current liabilities | 104,982 | 110,740 | |||
| Total liabilities | 318,665 | 321,208 | |||
| Equity | |||||
| Ordinary shares, NIS 0.01 nominal value, authorized 180,000 thousands shares; 66,784 thousands shares and 65,677 thousands shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 186 | 182 | |||
| Additional paid-in capital | 3,037,225 | 3,012,481 | |||
| Accumulated other comprehensive loss | (14,223 | ) | (8,771 | ) | |
| Accumulated deficit | (2,074,462 | ) | (2,047,878 | ) | |
| 948,726 | 956,014 | ||||
| Total liabilities and equity | 1,267,391 | $ | 1,277,222 |
All values are in US Dollars.
5
Stratasys Ltd.
Consolidated Statements of Operations
(in thousands, except per share data)
| Three Months Ended<br><br>September 30, | Nine Months Ended<br><br>September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||
| Net sales | ||||||||||||
| Products | $ | 112,133 | $ | 108,888 | $ | 340,927 | $ | 299,517 | ||||
| Services | 50,059 | 50,121 | 151,297 | 140,686 | ||||||||
| 162,192 | 159,009 | 492,224 | 440,203 | |||||||||
| Cost of sales | ||||||||||||
| Products | 55,916 | 54,820 | 176,421 | 151,471 | ||||||||
| Services | 35,527 | 36,001 | 107,984 | 101,697 | ||||||||
| 91,443 | 90,821 | 284,405 | 253,168 | |||||||||
| Gross profit | 70,749 | 68,188 | 207,819 | 187,035 | ||||||||
| Operating expenses | ||||||||||||
| Research and development, net | 23,145 | 22,645 | 71,489 | 65,683 | ||||||||
| Selling, general and administrative | 63,230 | 67,462 | 195,085 | 184,353 | ||||||||
| 86,375 | 90,107 | 266,574 | 250,036 | |||||||||
| Operating loss | (15,626 | ) | (21,919 | ) | (58,755 | ) | (63,001 | ) | ||||
| Gain from deconsolidation of subsidiary | 39,136 | - | 39,136 | - | ||||||||
| Financial income (expense), net | 452 | (634 | ) | (2,080 | ) | (1,383 | ) | |||||
| Income (loss) before income taxes | 23,962 | (22,553 | ) | (21,699 | ) | (64,384 | ) | |||||
| Income tax expense (benefit) | 3,298 | 699 | 2,796 | 6,009 | ||||||||
| Share in profit (losses) of associated companies | (1,915 | ) | 3,778 | (2,089 | ) | 1,229 | ||||||
| Net income (loss) | $ | 18,749 | $ | (18,076 | ) | $ | (26,584 | ) | $ | (57,146 | ) | |
| Net income (loss) per share | ||||||||||||
| Basic | $ | 0.28 | $ | (0.28 | ) | $ | (0.40 | ) | $ | (0.91 | ) | |
| Diluted | $ | 0.28 | $ | (0.28 | ) | $ | (0.40 | ) | $ | (0.91 | ) | |
| Weighted average ordinary shares outstanding | ||||||||||||
| Basic | 66,772 | 65,018 | 66,356 | 62,888 | ||||||||
| Diluted | 67,038 | 65,018 | 66,356 | 62,888 |
6
| Three Months Ended June 30, | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | Non-GAAP | 2022 | 2021 | Non-GAAP | 2021 | ||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | ||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | |||||||||||||||||
| Gross profit (1) | $ | 70,749 | $ | 7,990 | $ | 78,739 | $ | 68,188 | $ | 8,507 | $ | 76,695 | |||||
| Operating income (loss) (1,2) | (15,626 | ) | 20,149 | 4,523 | (21,919 | ) | 23,739 | 1,820 | |||||||||
| Net income (loss) (1,2,3) | 18,749 | (15,423 | ) | 3,326 | (18,076 | ) | 18,592 | 516 | |||||||||
| Net income (loss) per diluted share (4) | $ | 0.28 | $ | (0.23 | ) | $ | 0.05 | $ | (0.28 | ) | $ | 0.28 | $ | 0.01 | |||
| (1) | Acquired intangible assets amortization expense | 6,941 | 5,495 | ||||||||||||||
| Non-cash stock-based compensation expense | 1,061 | 804 | |||||||||||||||
| Restructuring and other related costs | (12 | ) | 67 | ||||||||||||||
| Impairment charges | - | 2,141 | |||||||||||||||
| 7,990 | 8,507 | ||||||||||||||||
| (2) | Acquired intangible assets amortization expense | 2,138 | 2,205 | ||||||||||||||
| Non-cash stock-based compensation expense | 6,330 | 7,154 | |||||||||||||||
| Impairment of long-lived assets | - | 1,242 | |||||||||||||||
| Restructuring and other related costs | 1,309 | 210 | |||||||||||||||
| Revaluation of investments | 901 | 2,025 | |||||||||||||||
| Contingent consideration | 394 | 197 | |||||||||||||||
| Other expenses | 1,087 | 2,199 | |||||||||||||||
| 12,158 | 15,232 | ||||||||||||||||
| 20,149 | 23,739 | ||||||||||||||||
| (3) | Gain from deconsolidation of subsidiary | (39,136 | ) | - | |||||||||||||
| Corresponding tax effect and other expenses | 3,564 | (5,147 | ) | ||||||||||||||
| $ | (15,423 | ) | $ | 18,592 | |||||||||||||
| (4) | Weighted average number of ordinary shares outstanding - Diluted | 67,038 | 67,038 | 65,018 | 65,950 |
7
| Six Months Ended June 30, | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | Non-GAAP | 2022 | 2021 | Non-GAAP | 2021 | ||||||||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | ||||||||||||
| U.S. dollars and shares in thousands (except per share amounts) | |||||||||||||||||
| Gross profit (1) | $ | 207,819 | $ | 27,593 | $ | 235,412 | $ | 187,035 | $ | 22,192 | $ | 209,227 | |||||
| Operating income (loss) (1,2) | (58,755 | ) | 67,235 | 8,480 | (63,001 | ) | 59,657 | (3,344) | |||||||||
| Net income (loss) (1,2,3) | (26,584 | ) | 32,295 | 5,711 | (57,146 | ) | 52,284 | (4,862) | |||||||||
| Net income (loss) per diluted share (4) | $ | (0.40 | ) | $ | 0.49 | $ | 0.09 | $ | (0.91 | ) | $ | 0.83 | $ | (0.08) | |||
| (1) | Acquired intangible assets amortization expense | 20,861 | 16,368 | ||||||||||||||
| Non-cash stock-based compensation expense | 3,041 | 2,226 | |||||||||||||||
| Restructuring and other related costs | (174 | ) | 1,457 | ||||||||||||||
| Impairment charges | 3,865 | 2,141 | |||||||||||||||
| 27,593 | 22,192 | ||||||||||||||||
| (2) | Acquired intangible assets amortization expense | 6,581 | 6,598 | ||||||||||||||
| Non-cash stock-based compensation expense | 21,714 | 20,914 | |||||||||||||||
| Impairment of long-lived assets | - | 2,664 | |||||||||||||||
| Restructuring and other related costs | 1,864 | 2,370 | |||||||||||||||
| Revaluation of investments | 3,217 | 556 | |||||||||||||||
| Contingent consideration | 1,197 | 590 | |||||||||||||||
| Other expenses | 5,069 | 3,773 | |||||||||||||||
| 39,642 | 37,465 | ||||||||||||||||
| 67,235 | 59,657 | ||||||||||||||||
| (3) | Gain from deconsolidation of subsidiary | (39,136 | ) | - | |||||||||||||
| Corresponding tax effect and other expenses | 4,196 | (7,373 | ) | ||||||||||||||
| $ | 32,295 | $ | 52,284 | ||||||||||||||
| (4) | Weighted average number of ordinary shares outstanding - Diluted | 66,356 | 67,007 | 62,888 | 62,888 |
8
StratasysLtd.
Reconciliation of GAAP to Non-GAAP Forward Looking Guidance
FiscalYear 2022
(in millions, except per share data)
| GAAP net loss | ($48) to ($39) |
|---|---|
| Adjustments | |
| Stock-based compensation expense | $33 to $35 |
| Intangible assets amortization expense | $37 to $38 |
| Reorganization and other | $14 to $16 |
| Tax expense (benefit) related to Non-GAAP adjustments | $3 to $5 |
| Non-GAAP net income | $6 to $8 |
| GAAP loss per share | ($0.72) to ($0.59) |
| Non-GAAP diluted earnings per share | $0.09 to $0.12 |
9
Exhibit99.2
Q3 2022 Results Speakers Dr. Yoav Zeif, CEO Eitan Zamir, CFO Yonah Lloyd, CCO & VP IR Nov. 10, 2022
Conference Call and Webcast Details US Toll - Free Dial - In 1 - 877 - 407 - 0629 International Dial - In 1 - 412 - 902 - 1012 Live Webcast and Replay https://event.choruscall.com/mediaframe/webcast.htm l?webcastid=Aau6uFJK 2 2
Forw a rd - Looking Statements Cautionary Statement Regarding Forward - Looking Statements The statements in this slide presentation regarding Stratasys' strategy, and the statements regarding its projected future financial performance, including the financial guidance concerning its expected results for 2022, are forward - looking statements reflecting management's current expectations and beliefs. These forward - looking statements are based on current information that is, by its nature, subject to rapid and even abrupt change. Due to risks and uncertainties associated with Stratasys' business, actual results could differ materially from those projected or implied by these forward - looking statements. These risks and uncertainties include, but are not limited to: the degree of our success at introducing new or improved products and solutions that gain market share; the extent of growth of the 3D printing market generally; the duration and severity of the macro - economic trends triggered by the global COVID - 19 pandemic, such as supply - chain delays, inflationary pressures and rising interest rates; the impact of potential shifts in the prices or margins of the products that we sell or services that we provide, including due to a shift towards lower margin products or services; the impact of competition and new technologies; the extent of our success at successfully integrating into our existing business, or making additional, acquisitions or investments in new businesses, technologies, products or services; potential changes in our management and board of directors; global market, political and economic conditions, and in the countries in which we operate in particular (including risks stemming from Russia’s invasion of Ukraine); potential further charges against earnings that we could be required to take due to impairment of additional goodwill or other intangible assets that we have recently acquired or may acquire in the future; costs and potential liability relating to litigation and regulatory proceedings; risks related to infringement of our intellectual property rights by others or infringement of others' intellectual property rights by us; the extent of our success at maintaining our liquidity and financing our operations and capital needs; the impact of tax regulations on our results of operations and financial condition; and those additional factors referred to in Item 3.D “Key Information - Risk Factors”, Item 4, “Information on the Company”, Item 5, “Operating and Financial Review and Prospects,” and all other parts of our Annual Report on Form 20 - F for the year ended December 31, 2021, filed with the SEC on February 24, 2022 (the “2021 Annual Report”). Readers are urged to carefully review and consider the various disclosures made throughout our 2021 Annual Report and the Reports of Foreign Private Issuer on Form 6 - K that attach Stratasys’ unaudited, condensed consolidated financial statements and its review of its results of operations and financial condition, for the quarterly periods throughout 2022, which Stratasys has furnished to the SEC over the course of 2022, and our other reports filed with or furnished to the SEC, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects. Any guidance provided, and other forward - looking statements made, in this slide presentation are made as of the date hereof, and Stratasys undertakes no obligation to publicly update or revise any forward - looking statements, whether as a result of new information, future events or otherwise, except as required by law. 3 2
Use of Non - GAAP Financial Information Use of Non - GAAP Financial Measures The non - GAAP data included herein, which excludes certain items as described below, are non - GAAP financial measures. Our management believes that these non - GAAP financial measures are useful information for investors and shareholders of our Company in gauging our results of operations (i) on an ongoing basis after excluding mergers, acquisitions and divestments related expense or gains and reorganization - related charges or gains, legal provisions, and (ii) excluding non - cash items such as stock - based compensation expenses, acquired intangible assets amortization, including intangible assets amortization related to equity method investments, impairment of long - lived assets and goodwill, revaluation of our investments and the corresponding tax effect of those items. These non - GAAP adjustments either do not reflect actual cash outlays that impact our liquidity and our financial condition or have a non - recurring impact on the statement of operations, as assessed by management. These non - GAAP financial measures are presented to permit investors to more fully understand how management assesses our performance for internal planning and forecasting purposes. The limitations of using these non - GAAP financial measures as performance measures are that they provide a view of our results of operations without including all items indicated above during a period, which may not provide a comparable view of our performance to other companies in our industry. Investors and other readers should consider non - GAAP measures only as supplements to, not as substitutes for or as superior measures to, the measures of financial performance prepared in accordance with GAAP. Reconciliation between results on a GAAP and non - GAAP basis is provided in a table later in this slide presentation. 4 2
W elcome Dr. Yoav Zeif CEO ▪ Delivered highest third quarter revenue in seven years and fifth consecutive quarter of positive earnings ▪ We expect to generate sustained operating profitability ▪ Challenges facing target industries justify accelerating the shift to additive: ▪ Adapt to logistical bottlenecks ▪ Reduce transportation costs ▪ Meet sustainability requirements ▪ Accelerate product innovation times 5
Managing Through the Current Macro Environment ▪ Uncertain economy is affecting purchase behavior - Sales cycles are longer with some order deferrals ▪ Broad set of offerings for entire product value chain is helping mitigate these impacts ▪ Steady organic contributions and incremental revenues from new technologies delivering consistent growth with improving margins ▪ Focused on relentless cost management, with 130 basis point improvement in OpEx as percentage of revenue 6 6
Our Business is in Growth Mode ▪ OEM revenue up 10% y/y, on constant currency basis ▪ Total revenue up 7.8%* y/y ▪ 18.9%* y/y OEM systems revenue growth, highest Q3 in 6 years ▪ New technologies SAF, P3 and Neo more than double our addressable market ▪ New use cases and opportunities to replace traditional manufacturing across verticals ▪ Repeat FDM sale to global auto OEM for more industrial, manufacturing - grade F900 systems ▪ Strong balance sheet with no debt * Adjusted for FX and divestitures
Stratasys agrees to acquire Covestro’s AM materials business ▪ Global R&D, development and sales teams ▪ Portfolio of 60 materials ▪ Hundreds of patents and patents pending Building Leading Polymer Materials Portfolio for Manufacturing 13 Validated FDM materials and OpenAM now available ▪ Filaments from VICTREX, Kimya, Covestro ▪ New color options for ULTEM 9085 resin, PC, PCS - ABS – more end - use applications ▪ OpenAM software provides access to open market filaments or proprietary formulas 8
New Validated industrial materials for Origin One 3D printer ▪ P3 Stretch 475 from Henkel Loctite – soft elastomer for applications such as automotive door seals ▪ P3 Deflect 120 from Evonik – High strength at high temperatures, ideal for molds FDA 510(k) clearance for revolutionary resin for J5 DentaJet printer for dentures ▪ Will be a disruptive growth driver for Stratasys in dentures ▪ $5 billion addressable market Building Leading Polymer Materials Portfolio for Manufacturing 9
Investments in Artificial Intelligence – Available in 2023 $10 million strategic investment ▪ Axial3D’s AI - powered algorithms shave hours off time to prepare scans for 3D printing models ▪ Stratasys and Axial3D preparing joint offering to make models more accessible to hospitals and medical device makers worldwide ▪ Cloud - based closed - loop quality assurance for additive manufacturing – ensuring parts match CAD files ▪ Latest version uses AI to predict and pre - adjust model changes in advance 10
▪ Solid results in a challenging environment ▪ OEM business growth of ~10% vs. Q3 2021 (constant FX) ▪ Efficiency helping improve OpEx as percentage of revenue Eitan Zamir CFO CFO Remarks 11
Resilient Financial Results GAAP Non - GAAP Q 3 - 21 Q3 - 22 Change Y/Y Q3 - 21 Q3 - 22 Change Y/Y Total Revenue 159.0 162.2 2.0% 159.0 162.2 2.0% Gross Profit 68.2 70.7 2.5 76.7 78.7 2.0 ▪ % Margin 42.9% 43.6% 0.7% 48.2% 48.5% 0.3% Operating Income (Loss) (21.9) (15.6) 6.3 1.8 4.5 2.7 ▪ % Margin - 13.8% - 9.6% 4.2% 1.1% 2.8% 1.7% Gain from deconsolidation of subsidiary - 39.1 39.1 - - - Net Income (Loss) (18.1) 18.7 36.8 0.5 3.3 2.8 ▪ % Margin - 1 1.4% 11.6% 23.0% 0.3% 2.1% 1.8% Diluted EPS (0.28) 0.28 0.56 0.01 0.05 0.04 Diluted Shares 65.0 67.0 3.1% 66.0 67.0 1.6% Note: $ in millions unless noted otherwise. All numbers and percentages rounded 12
Revenue Growth Continues Q3' 21 Q4' 21 Q1' 22 * Reflects only 2 months of MakerBot revenue. Quarterly Trend Revenue Growth – Q3’22 108.9 1 18.0 1 13.1 1 15.7 1 12.1 50.1 49.0 50.3 50.9 50.1 159.0 167.0 163.4 166.6 162.2* Q2' 22 Q3' 22 Product Service Revenue Y/Y Vs. Q3 2019 Product 3.0% 5.4% ▪ System 7.7% 14.9% ▪ Consumables - 1.4% - 2.7% Service - 0.1% - 2.1% ▪ Customer Support 4.7% 10.3% Revenue of $162.2 million up 2% YoY (7.8% adjusted for FX, divestitures) Product revenue $112.1 million, up 3.0% vs. Q3 2021 (10.5% with FX/divestitures), and services revenue $50.1 million down 0.1% (up 2.1% with FX/divestitures) Note: $ in millions unless noted otherwise. All numbers and percentages rounded 13
Increasing Gross Margins 14 GAAP Non - GAAP GAAP and Non - GAAP margin improvements driven by operational efficiencies and MakerBot divestment, despite FX deterioration 42.9 % 43 . 7% 40 . 5% 43.6 % 49 . 7% 49 . 6% 47 . 5% 42 . 6% Product Gross Margin 50 . 1% 47.2% 28 . 2% 29 . 6% 31 . 7% 25 . 2% 29 . 0% Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3 '22 48 . 2% 48 . 7% 47 . 3% 47 . 6% 48.5 % 57 . 0% 56 . 2% 53 . 7% 53.6 % 56 . 7% 29 . 2% 30 . 6% 33.1 % 34.0 % 30 . 3% Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3 '22 Total Gross Margin Service Gross Margin All percentages rounded
Operating Expenses Reduction Reflecting Scalability GAAP operating expenses (absolute and as a percentage of revenues) Non - GAAP operating expenses (absolute and as a percentage of revenues) Operating Expenses improvement trend ongoing 90.1 86.4 Q3'21 Q3 ' 22 53.3% - 3.4% 56.7% 74 . 9 74 . 2 Q3 ' 21 Q3 ' 22 45.8% - 1 . 3 % 47.1% Note: $ in millions unless noted otherwise. All numbers and percentages rounded 15
Profitable Results GAAP operating loss Non - GAAP operating income Improving operating income and net income reflect business scalability and operational efficiencies, resulting in gross margin growth and lower operating expenses (21.9) (15.6) Q3 ' 21 Q3 ' 22 1.8 4.5 Q3 ' 21 Q3 ' 22 GAAP net loss Non - GAAP net income 18.7 0.5 3.3 (18.1) Q3 ' 21 Q3'22 Q3'21 Q3'22 Note: $ in millions unless noted otherwise. All numbers and percentages rounded 16
Fortified Balance Sheet and Responsible Cash Use Strong balance sheet at $349M cash and equivalents after recent strategic investments Cash use tied to deliberately increased inventory purchases Balance sheet items Cash flow from operating activities 3.0 (18.4) Q3' 21 Q3' 22 Q3 - 21 Q2 - 22 Q3 - 22 Cash and Cash Equivalents and Short - term deposits 519.9 441.5 348.7 Accounts Receivable 121.8 132.3 140.3 Inventories 119.9 153.7 170.4 Net Working Capital 624.8 582.7 480.7 Note: $ in millions unless noted otherwise. All numbers and percentages rounded 17
Full Year 2022 Outlook Updated to Exclude MakerBot Divestiture 18 *Adjusted for FX and divestitures ▪ $ 5 M - $ 10 M ▪ Improvement due primarily from divestitures and improved OpEx efficiencies OpEx Reduced Gross Margins Improving ▪ Flat to slightly higher than 2021 ▪ Targeting over 50% long - term when logistics and inflation issues pass and we execute growth plan ▪ GAAP net loss of $48M - $39M, or ($0.72) - ($0.59) per diluted share ▪ Non - GAAP net income $6M - $8M or $0.09 - $0.12 per diluted share ▪ Adjusted EBITDA of $34M - $37M Earnings Improvement ▪ $648M - $652M ‒ Removal of MakerBot ($17M) ‒ Delayed purchase activity ‒ Continuing FX challenges Revenue Growth Appx. 10% Y/Y* Operating Margins Improvement ▪ Non - GAAP slightly above 2% ▪ Targeting double - digit margins long - term CapEx Reduced ▪ $15M - $20M
▪ Today’s business challenges reinforce additive manufacturing’s benefits ▪ We continue to invest in hardware, materials and software to expand applications and drive additive manufacturing to scale ▪ Thank you to our global teams for rising to the challenge and helping drive continued profitability ▪ Relentless focus on execution and investment for growth, profitability and shareholder value CEO Summary Dr. Yoav Zeif CEO 1 9 19 19
Thank You 20
App e ndix Note: $ in thousands unless noted otherwise. All numbers and percentages rounded Three months ended September 30, 2022 Three months ended September 30, 2021 GAAP Adjustments Non - GAAP GAAP Adjustments Non - GAAP Gross Profit (1) $70,749 $7,990 $78,739 $68,188 $8,507 $76,695 Operating income (Loss) (1,2) (15,626) 20,149 4,523 (21,919) 23,739 1,820 Net income (Loss) (1,2,3) 18,749 (15,423) 3,326 (18,076) 18,592 516 Net income (Loss) per diluted share (4) $0.28 ($0.23) $0.05 ($0.28) $0.29 $0.01 1) Acquired intangible assets amortization expense 6,941 5,495 Non - cash stock - based compensation expense 1,061 804 Restructuring and other related costs (12) 67 Impairment charges - 2,141 7,990 8,507 2) Acquired intangible assets amortization expense 2,138 2,205 Non - cash stock - based compensation expense 6,330 7,154 Impairment of long - lived assets - 1,242 Restructuring and other related costs 1,309 210 Revaluation of investments 901 2,025 Contingent consideration 394 197 Other expenses 1,087 2,199 12,159 15,232 20,149 23,739 3) Gain from deconsolidation of subsidiary (39,136) - Corresponding tax effect and other expenses 3,564 (5,147) ($15,423) $18,582 4) Weighted average number or ordinary shares outstanding – Diluted 67,038 67,038 65,018 65,950